Consumer Directed Health Care is a term that needs clarification. Consumers decide how to spend their money. When you sit down to eat a restaurant, decisions are made are based upon combination of desire and cost. Almost all restaurants have prices next to each menu option. I have only eaten at one restaurant that did not have a price associated with each meal. Admittedly, I cautiously chose a meal that I did not think would bounce on my credit card. I was relieved when the bill came and I could afford to pay for what I ordered.
Accessing health care is similar to eating in a restaurant without a price for each service. As a result people do not choose what they think they need. They usually want ‘everything done.’ Sticker shock is common when the hospital bills arrive. People naively assume that insurance will protect them from bankruptcy. Himmelstein et al., 2009 reported in The American Journal of Medicine that between 62-69% of bankruptcies were related to medical bills; and yet 75% of these had health insurance. The Affordable Care Act has done nothing to decrease health care costs. In fact, because or premium hikes that have doubled and tripled, many more bankruptcies are likely.
There are a few simple solutions to controlling health care costs:
1. Allow patients to have control of a portion of their health care dollars and allow them to have the freedom of choice regarding their physician or hospital.
Note: Health Savings Accounts are conceptually rich because it sounds like people have control of their health care dollars. Those who are in favor of the ACA tout that ‘the Republicans have been given what they want. They now have high deductible policies and Health Savings Accounts (HSA).” But these HSA dollars can only be spent in an inflated market. For example: a patient of mine recently had a CT scan of the head. Her portion of the CT scan was $1,500 dollars! If she had her choice, she could have had this procedure done for $150-200. But because it was done in a hospital, and because of insurance contracts, free market forces were neutered.
Another patient of mine had blood work done at a local lab. She did not follow the directions outlined on my website for purchasing her blood work. As a result, the lab bill was approximately $1,200. If she would have followed my instructions, the costs were approximately $250.
Patients do not know how meander thru the complicated billing world in the United States. Since implementation of the ACA, patients are challenged to pay their premiums and co-pays beneath their deductibles. The ACA prevents the HSA dollars from having any purchasing power.
2. Allow free market forces to give the patients purchasing power with hospital visits. The non-profit status for hospitals needs to change. I recently reviewed the bills for a patient of mine and the hospital charged 10X the amount that they accept from Medicare for many of the medications and procedures. The initial bill was approximately $250,000. After re-pricing the bill, a reasonable amount comparable to what the hospital would accept from Medicare was approximately $75,000.
It is very difficult to get an itemized bill from hospitals. A common phrase I have been given, “We have contracts with insurance carriers and have to honor these contracts.” My retort is, “I indirectly represent the millions of uninsured who do not have a voice. I think we should be afforded some purchasing power.”
3. Allow unspent money in the HSA to accumulate. Why should Congress put a limit on the amount of money that is put away into the Health Savings Accounts? If a reasonable savings account was started at birth, there would be more than enough money to take care of the majority of the health care needs of the child.
When patients are aware of the costs for their health care, they will make better choices. The majority of people will spend their money wisely. According to the RAND Health researchers, we could save billions of dollars by encouraging more Consumer Directed Plans. I contend that we could save even more money by creating a free market world where these health care dollars are spent. Otherwise, the current high deductible policies with HSAs are creating poker chip dollars that can only be used in certain locations.